2026-04-24 20:03:19
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Tomorrow, we’ll break down 17 key reports for PRO members, including IBM's mixed quarter as AI reshapes its business and ServiceNow’s aggressive M&A push.
Today, the spotlight is on Tesla and Intel, two companies now tied together by Musk’s Terafab project. Here’s what their latest results revealed.
🚖 Tesla: $25 Billion AI Pivot
🏭 Intel: CPU Renaissance
🚀 SpaceX: Potential Cursor Acquisition
Tesla’s AI and robotics pivot got materially more expensive this quarter.
Management raised FY26 CapEx guidance to $25 billion, up sharply from $9 billion in FY25, to fund projects tied to AI training clusters, Terafab, and Optimus 3.
With the AI5 chip already taped out and a $3 billion dedicated research fab under construction at Giga Texas, Tesla is investing beyond vehicles and into the physical infrastructure behind its AI ambitions.
Revenue grew 16% Y/Y to $22.4 billion ($0.2 billion beat).
Gross margin reached 21% (+5pp Y/Y).
Operating margin improved to 4% (+2pp Y/Y).
Non-GAAP EPS was $0.41 ($0.06 beat).
Operating cash flow grew 17% Y/Y to $0.5 billion.
Free cash flow grew 117% Y/Y to $1.4 billion.
Tesla again withheld full-year guidance. Management continues to improve overall profitability over time, as AI, software, and fleet-based profits boost the existing hardware-related baseline.
🚘 Automotive held up: Automotive revenue grew 16% Y/Y, showing signs of life after a difficult 2025. Tesla delivered 358K vehicles in Q1, missing the 365K consensus. It was still 6% above last year’s soft comparison, when factory retooling and protests weighed on results. Some of that volatility may also reflect lingering distortion from the EV tax credit deadline, which pulled demand forward before its September 2025 expiration.
⚡️ Energy lumpiness: The Energy segment saw a 12% revenue decline as storage deployments fell to 8.8 GWh, down sharply sequentially. Management said the business remains inherently lumpy because results depend on customer deployment timing, but still expects FY26 deployments to exceed FY25.
🔌 Services and Other surge: Revenue in Services and Other jumped 42% Y/Y to $3.8 billion, helped by the Full Self-Driving (FSD) subscription moving from $8,000 for lifetime access to $99/month, plus record Supercharger usage. With FSD subscribers up 51% Y/Y to 1.28 million, Tesla is steadily turning its installed base into a higher-margin recurring revenue stream.
📈 Margin recovery with a catch: Gross margin climbed to 21%, but the improvement was heavily aided by non-recurring windfalls, including $230 million in Automotive warranty write-downs and $250 million in Energy tariff recognitions. The headline improvement looked encouraging, but these one-time items partly masked pressure from excess inventory and softer global demand.
🚧 The Hardware 3/4 operational burden: Musk said Hardware 3 lacks the memory bandwidth for future autonomy, pushing Tesla toward Hardware 4 and beyond. To manage the retrofit process, Tesla plans dedicated city-based retrofit centers and a separate v14 software update path for HW3. That expands the cost and complexity of supporting a massive legacy fleet while trying to move the platform forward.
🚖 Robotaxi rollout: Following the Austin launch, Tesla has officially expanded its unsupervised Robotaxi service to Houston and Dallas. The service is slated for a rapid multi-state expansion (targeting 12+ states by year-end). The bigger message was that Cybercab development remains on schedule for 2026. The risk is that regulatory approvals now matter as much as technical progress.
💰 Free cash flow warning: Tesla’s balance sheet grew to $44.7 billion in cash, a critical war chest given the road ahead. While Q1 produced a surprise $1.4 billion in positive free cash flow, management warned that the heavy $25 billion CapEx cycle will likely push FCF into negative territory for the remainder of 2026. This cash burn phase is the price of admission for the growth expected from Cybercab and Semi volume production in late 2026.
Bottom Line: Tesla is spending like a company that wants to own the full AI mobility stack, not just sell more cars. The quarter showed an auto business that is holding up, a services engine that is gaining quality, and a balance sheet still strong enough to fund the push. The trade-off is obvious: free cash flow could come under pressure as CapEx surges. But management is clearly choosing long-term platform control over near-term efficiency.
Intel is finally seeing the payoff from its reset, as AI inference and agentic workloads lift demand for CPUs, wafers, and advanced packaging.
While Intel missed the first GPU-led wave, surging demand for Xeon server processors helped drive a major revenue and adjusted EPS beat this quarter.
With a strategic role in the Terafab project and the repurchase of its Irish fabrication facility, Intel is repositioning its balance sheet to reclaim a larger role in global AI infrastructure.
Revenue grew 7% Y/Y to $13.6 billion ($1.2 billion beat).
Gross margin improved to 39% (+2pp Y/Y).
Operating margin was -23% (-21 pp Y/Y).
Non-GAAP EPS $0.29 ($0.28 beat).
Operating cash flow grew 35% Y/Y to $1.1 billion.
Free cash flow improved to an outflow of $2.0 billion.
Revenue ~$14.3 billion ($1.2 billion beat).
Non-GAAP EPS $0.20 ($0.12 beat).
🧠 CPU Renaissance: Intel’s Data Center and AI revenue rose 22% to $5.1 billion as inference and agentic workloads boosted demand for Xeon. As AI shifts from training giant models to serving real-world applications, the CPU is becoming more central to the data center stack again.
📉 Foundry momentum: Foundry revenue rose 16% to $5.4 billion, while Client Computing revenue was held back by supply constraints and a still-tight PC environment. The move toward higher-priced AI PCs helped support an adjusted gross margin of 41%. The bigger takeaway is that Intel now looks more constrained by supply than by demand.
🏭 Terafab strategic pivot: Intel is joining the Terafab project as a strategic partner, offering design and advanced packaging resources for the Austin-based facility. This partnership, alongside the US government’s 10% stake, secures Intel’s position at the heart of the Sovereign AI movement and strengthens the strategic case for its Foundry Services division.
💰 Balance sheet flex: Intel repurchased the 49% stake in its Fab 34 joint venture in Ireland for $14.2 billion, reclaiming full control of a strategic manufacturing asset. The move signals growing confidence in long-term demand and in Intel’s ability to fund its next phase from a stronger footing.
🚀 Guidance blowout: Intel guided Q2 revenue to $13.8 billion–$14.8 billion, well above expectations. The message was clear: demand is there. The next challenge is scaling production and packaging capacity fast enough to keep up.
Bottom Line: Intel is no longer just a turnaround story. It is becoming a capacity story. The quarter showed that Xeon, packaging, and foundry demand are all benefiting from the shift toward inference and agentic AI. The question now is less whether Intel is relevant and more whether it can scale supply fast enough to match the opportunity.
SpaceX is pushing deeper into AI. After its $250 billion merger with xAI in February, the company announced a major partnership this week with Cursor, a leader in vibe coding.
The structure is unusual. SpaceX has the option to acquire Cursor later this year for $60 billion, or pay $10 billion fee tied to the partnership if a full acquisition does not happen.
The timing of this deal suggests where Musk sees a gap in his AI strategy. Despite xAI’s massive valuation, Musk admitted last month that his chatbot, Grok, was “behind in coding” and needed a complete rebuild.
Cursor brings something xAI’s giant compute buildout still does not: a product developers already use at scale. This is not just about fixing Grok’s coding weakness. It is also about connecting compute to an app layer that already matters.
By partnering with Cursor, SpaceX gets a shortcut into one of the most valuable layers of the AI stack:
Compute play: Cursor has been constrained by limited processing power. SpaceX is solving this by giving them access to Colossus, a supercomputer powered by 200,000 NVIDIA GPUs (equivalent to a million H100s).
Talent pull: xAI has already hired two of Cursor’s senior engineering leads to report directly to Musk. A full acquisition would consolidate top coding talent under one roof.
Model leverage: Cursor relies on models from rivals today, but a deeper partnership could move more of that stack closer to xAI over time.
Data advantage: Cursor may hold one of the richest proprietary datasets on how developers interact with coding models in the wild, which could become valuable training fuel over time.
Cursor also has a reason to lean in. It depends on rival models today, leaving it exposed as the frontier labs push deeper into coding themselves.
The structure may also reflect timing. With SpaceX preparing for an IPO, a full acquisition now could complicate the story and force broader disclosure changes. A partnership-first approach gives Musk a way to lock Cursor closer to the ecosystem without pulling the trigger immediately.
Bottom Line: SpaceX is using its compute advantage to accelerate its AI push without committing to a full acquisition today. The Cursor deal helps close a product gap now while reinforcing a bigger idea for investors: SpaceX is becoming a hybrid of satellite platform, launch infrastructure, and AI optionality.
Stay tuned for our full breakdown of the company’s financials once the S-1 goes live in the coming months.
That’s it for today!
Stay healthy and invest on.
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Author’s Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization’s views.
Disclosure: I am long TSLA, GOOG, and NVDA in the App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
2026-04-22 01:36:27
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As it turns 50, Apple is entering its most delicate transition since the iPhone.
Tim Cook inherited Steve Jobs’ creation in 2011 and transformed it into one of the most efficient profit machines in corporate history. In September, he will hand the reins to hardware chief John Ternus.
Now, Ternus must show that Apple can still invent what comes next.
Today at a glance:
📱 Apple After Tim Cook
🤝 Amazon + Anthropic Part Deux
For 15 years, Tim Cook’s biggest product wasn’t a device. It was Apple’s operational excellence. He inherited a company built on the creative gravity of Steve Jobs and transformed it into a disciplined, $4 trillion fortress.
Under Cook, Apple became a cash-printing machine. Revenue and profit roughly quadrupled, while the stock climbed nearly 20x, driven by buybacks and a higher multiple.
AirPods and the Apple Watch arrived under Cook, but his real legacy was turning Apple into a profit-maximizing engine through supply-chain excellence and high-margin Services. Cook improved the operations and maximized the terminal value of the iPhone era.
The transition to John Ternus suggests Apple wants its next chapter to be defined less by optimization and more by product ambition. Apple is elevating an operator rooted in hardware execution at the exact moment the company needs its next device story.
Cook isn’t leaving the building. He’ll transition to Executive Chairman to manage global policy and his high-stakes relationship with the Trump administration. However, the CEO office will now belong to a 25-year Apple veteran described as “Tim Jr.” in style but an engineer by trade.
2026-04-18 22:03:10
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📊 Monthly reports: 200+ companies visualized.
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📚 Access to our archive: Hundreds of business breakdowns.
📩 Saturday PRO reports: Timely insights on the latest earnings.
Today at a glance:
⚡️ TSMC: Agentic Shift Acceleration
🔬 ASML: AI Demand Boosts Outlook
💊 J&J: Oncology Powers Guidance
👔 Morgan Stanley: Record Trading
🏛️ Goldman Sachs: Equities Hit Records
🥤 PepsiCo: Snack Volume Returns
🧬 Abbott: Strategic Reset
🏦 Schwab: Trading Records
📈 Blackrock: iShares Momentum
TSMC’s Q1 FY26 results reflected a massive transition, as demand for AI infrastructure moved from speculation to concrete financial gains. Revenue skyrocketed 41% Y/Y to $35.9 billion ($0.4 billion beat), while net income surged 58%. Management raised its full-year 2026 revenue growth forecast to above 30%, up from the previous ~30% target.
Gross margins expanded to a staggering 66%, far exceeding the analyst consensus of 64.5%. CEO C.C. Wei noted that the industry is moving beyond generative AI into agentic AI—where platforms perform actions rather than just answering queries—leading to a step-up in chip demand that shows no sign of cooling.
TSMC’s dominance is now almost entirely tied to its most advanced leading-edge technologies. Chips made with 7nm or smaller nodes accounted for 74% of total wafer revenue. The high-performance computing (HPC) segment, which houses the powerhouse AI chips for NVIDIA and AMD, now accounts for 61% of total revenue. That compares to just 41% four years ago.
While the 3nm ramp-up continues to accelerate (now 25% of revenue), management is keeping its foot on the gas. Capital expenditure is trending toward the top end of the $52–$56 billion range for 2026. This aggressive spending serves as a warning shot to rivals like Intel. C.C. Wei pointedly remarked that there are “no shortcuts” to foundry leadership, emphasizing that manufacturing excellence and customer trust cannot be bought overnight.
Despite the blowout numbers, shares dipped slightly as investors digested potential macro risks. CFO Wendell Huang acknowledged that the conflict in the Middle East could drive up costs for specialized chemicals and gases, such as helium. While it is “too early to quantify” the exact impact on profitability, management remains confident in their supply chain resiliency and energy stability in Taiwan.
TSMC is also doubling down on its global footprint, with total US investment pledges now reaching $165 billion. As the firm prepares for a sequential 10% revenue jump in Q2, the narrative is clear: TSMC is the indispensable foundation of the AI era, and for now, its fabs are running hot with no significant competition in sight through the end of the decade.
Check out the earnings call transcript on Fiscal.ai here.
ASML kicked off Q1 2026 with a solid beat, proving that the semiconductor industry’s lithography intensity is only increasing. Revenue rose 13% Y/Y to €8.8 billion (€110 million beat), while GAAP EPS of €7.15 comfortably topped estimates. Citing an insatiable appetite for AI infrastructure, management raised and narrowed its full-year 2026 sales guidance to €36-€40 billion (an improvement from €34-€39 billion previously).
The quarter’s bottom line was particularly robust, with a 53% gross margin that exceeded guidance. This was driven by a strong mix in the Installed Base business, where customers are paying for upgrades and services to squeeze more capacity out of existing tools while waiting for new systems to arrive.
The narrative remains dominated by demand for EUV (Extreme Ultraviolet). CEO Christophe Fouquet noted that customers are “sold out for 2026” and that ASML is racing to ensure it isn’t responsible for the bottleneck in global chip production. The firm expects to ship at least 60 Low NA EUV systems this year and has already mapped out a path to 80 units in 2027. Surprisingly, the older Immersion DUV business also showed resilience; previously expected to decline due to China trade tensions, demand has turned flattish as chipmakers potentially accelerate purchases ahead of new export curbs.
Geopolitics remains the primary overhang. China’s share of system sales dropped to 19% this quarter (down from 36% in Q4), aligning with management’s long-term target of 20%. While US lawmakers recently introduced the MATCH Act to further restrict equipment sales and servicing, management asserted that their new guidance range can “accommodate potential outcomes” of these export discussions. Despite the raised outlook, shares dipped 5% on the news as a slightly soft Q2 revenue guide of €8.4–€9.0 billion fell just shy of lofty analyst expectations for the bridge into the year’s second half.
2026-04-17 20:03:21
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Netflix walked away from the Warner Bros. Discovery merger in February, avoiding a bidding war with Paramount Skydance. Investors initially cheered the discipline, and the failed deal delivered a $2.8 billion breakup fee that boosted Q1 results.
That relief didn’t last. Shares fell nearly 9% after earnings, as investors looked past the windfall and focused on what comes next: a business that now has to justify its premium valuation through price hikes, ad-tier scaling, and internal efficiency.
Its unchanged 13% revenue growth outlook for 2026 implies slower momentum from here. Now that the M&A shortcut is gone, Netflix must prove it can build the next leg of growth on its own.
Today at a glance:
🍿 Netflix Q1 FY26
🎯 3 Strategic Priorities
📈 Streaming Market Share
🛰️ Amazon: Buying the Spectrum
Revenue +16% Y/Y to $12.2 billion ($80 million beat).
Operating margin 32% (+1pp Y/Y).
EPS $1.23 ($0.11 miss).
Termination fee of $2.8 billion included in ‘other income’ (see visual).
Cash and short-term investments: $12.3 billion.
Debt: $14.4 billion.
Revenue +12%-14% to ~$51.2 billion.
Operating margin 31.5% (+2pp Y/Y).
📈 Top-line momentum: Revenue rose 16% Y/Y and was slightly ahead of expectations. While Netflix no longer provides subscriber counts, management attributed the beat to slightly higher-than-planned membership growth. The growth was global, with Latin America (+19%) and Asia-Pacific (+20%) growing the fastest.
📢 Ads on track: The advertising segment remains a primary growth engine. Netflix reiterated its projection for ad sales to double to ~$3 billion in 2026. This trajectory is essential to the multi-tier strategy, serving as a safety net against churn as inflation pressures consumers to cut back on non-essentials.
📉 Cautious Q2 guidance: Management guided for an operating margin of 32.6%, a 150bp decline Y/Y. The softer outlook reflects front-loaded content amortization, with margin expansion expected to resume in the second half. Netflix has been a story of steady margin expansion if we zoom out.
🏷️ Price increase kicks in: In March, Netflix hiked the price of its standard ad-free plan by $2 to $20/month. Since this was announced late in Q1, the financial impact was not reflected in these results but is expected to be a primary driver of revenue growth in the coming quarters.
👔 End of an era: Co-founder Reed Hastings announced he will step down from the board in June after 29 years. His departure marks the final transition to the Ted-and-Greg era of leadership. Symbolically, it reinforces that Netflix is now being judged less as a visionary disruptor and more as a scaled media platform expected to deliver steady growth and disciplined returns.
Netflix is evolving into a diversified entertainment ecosystem. To compete with legacy media conglomerates and social apps like TikTok or YouTube, management is focusing on three fronts:
Content: Netflix is expanding beyond binge-worthy series to capture more “moments of truth.” Live events drove record sign-ups in Japan this quarter, while podcasts and games aim to make Netflix more of a regular destination rather than a weekend-only app.
Technology: Management is leaning on AI to improve efficiency and discovery. The acquisition of Ben Affleck’s AI startup, InterPositive, suggests Netflix wants to give filmmakers AI-powered production tools. On the consumer side, a vertical video discovery feed with TikTok-like browsing is coming later this month.
Monetization: Ads and pricing work together. The ad tier now drives 60% of new sign-ups, giving Netflix a lower-cost entry point, more room for targeted third-party bundling, and more flexibility to raise prices elsewhere.
Bottom line: Ads and pricing can support low double-digit growth, but investors may still want clearer evidence that Netflix’s rising content spend is generating the kind of returns that justify its premium multiple (well above 30x forward earnings).
According to Nielsen, streaming accounted for 48% of US TV time in February, up from 43.5% a year ago and at an all-time high. The growth came at the direct expense of cable, which fell to a 20% share, down from 23% a year ago.
Netflix captured 8.4% of US TV time in February, slightly up from 8.2% a year ago. This somewhat flattish engagement has become a regular topic on the earnings calls. But co-CEO Greg Peters often points to retention as a better metric than hours watched to evaluate Netflix’s ability to steadily raise prices.
Warner + Paramount (part of ‘Other’) remained small at 3.4% market share in February if we combined them (+0.9pp Y/Y).
Peacock was a big winner in February, with 3.0% market share (up 2X from a year ago), thanks to the trifecta of Super Bowl LX, the Milan Cortina Winter Olympics, and the NBA All-Star Weekend. But these are one-off major sports events, and the share boost is likely to be short-lived. This is textbook cable-stealing, and not at the expense of other streamers.
YouTube remains the streaming king, with a 12.7% share of US TV time, up from 11.6% a year ago, but still below its July 2025 peak.
Amazon has spent years—and billions—trying to catch up to SpaceX in the low Earth orbit (LEO) satellite race. While Elon Musk’s Starlink already has a massive head start with 10,000 satellites, Amazon Leo is shifting its strategy from raw scale to strategic integration. Following a major partnership to bring Wi-Fi to Delta Air Lines, Amazon is now moving from the cockpit to the pocket.
Amazon’s $11.6 billion acquisition of Globalstar is a definitive play for the signal in your smartphone. By swallowing the satellite operator, Amazon is buying a regulatory shortcut to challenge Starlink’s direct-to-device (D2D) dominance, with plans to launch its own consumer service by 2028.
The disparity in orbit remains massive: SpaceX has roughly 10,000 satellites to Amazon’s ~265 today.
However, Globalstar provides two things Amazon couldn’t get quickly:
Buying the spectrum: Access to radio frequency licenses that allow satellites to talk directly to unmodified smartphones.
Securing the customer: A “long and proven track record” with Apple, which uses Globalstar for its Emergency SOS features.
Ben Thompson notes that this deal might be less about Amazon becoming a phone company and more about Apple vs. Musk. In his view, Apple likely "made this deal happen" to avoid being forced to negotiate with SpaceX and to maintain control over its ecosystem. For Amazon, it's a win-win: they deepen their AWS relationship with Apple while gaining the infrastructure to track their own global logistics and drone fleets.
Critics point out that Globalstar’s 24 satellites are aging “bent-pipe” relays—technology that simply bounces a signal without processing it. But for Amazon, the satellites are disposable; the regulatory rights are eternal.
Aparna Venkatesan, astronomy professor at the University of San Francisco, explained to Wired:
“It’s tapping into this package of already preapproved global spectrum rights [...] it’s going to get connected to this huge iPhone market. So I think that’s a very compelling business package.”
Bottom line: Starlink is building the fastest, largest network. Amazon is building the most integrated ecosystem. By controlling the spectrum that powers the iPhone's safety features, Amazon ensures that even if it loses the numbers game in space, it remains an essential service on the ground.
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Disclosure: I own AMZN, META, and NFLX in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
2026-04-15 21:52:59
Welcome to the Premium edition of How They Make Money.
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A new earnings season is here with the big banks kicking us off.
Later this week, we’ll have a look at Netflix and the picks and shovels of the AI era, TSMC and ASML.
The banking sector’s first report card of 2026 arrived amidst a world on edge. The soft landing narrative was abruptly challenged by the outbreak of the Iran war, a conflict that has sent shockwaves through energy markets.
Against this volatile backdrop, the results were surprisingly robust. But the numbers hidden beneath the surface tell a story of a widening divide. While the ultra-wealthy are seeing their portfolios balloon from record equity prices, the gas pump tax is beginning to bite at the lower end.
Let’s break down the results.
Today at a glance:
JPMorganChase: Trading Powerhouse
Bank of America: Equities Take the Crown
Wells Fargo: Expansion Squeeze
Citigroup: Turnaround Hits High Gear
As a reminder, banks make money through two main revenue streams:
💵 Net Interest Income (NII): The difference between interest earned on loans (like mortgages) and interest paid to depositors (like savings accounts). It’s the primary source of income for many banks and depends on interest rates.
👔 Noninterest Income: The revenue from services unrelated to interest. It includes fees (like ATM charges), advisory services, and trading revenue. Banks relying more on noninterest income are less affected by interest rate changes.
Here are the significant developments shaping Q1 FY26:
🚢 Strait of Hormuz shockwave: Geopolitics is no longer a distant concern. Wells Fargo reported that gasoline spending has surged nearly 30% since the conflict began. While Jamie Dimon notes the economy remains resilient for now, there is a growing consensus that it takes several months for high fuel costs to drain excess savings and force a pullback in discretionary spending.
🎰 Traders feast on volatility: Market chaos is a goldmine for the desks. JPMorgan (+20%) and Citigroup (+19%) delivered historic trading results as tensions in the Middle East and AI-driven tech swings forced a massive rebalancing of global portfolios. For the big banks, volatility is proving to be a highly profitable hedge against slowing loan growth.
🤖 Private credit boogeyman: The big banks disclosed over $100 billion in exposure to private credit. While Jamie Dimon insists the banks are “not particularly worried” because they sit behind a large loss cushion, investors are hyper-focused on how these loans—often tied to software firms—will hold up as AI disrupts traditional business models.
🏦 NII peak is here: The era of easy interest income is fading. JPMorgan and Wells Fargo both signaled that Net Interest Income (NII) is reaching a ceiling. As the ‘higher-for-longer’ environment finally begins to normalize and deposit costs remain sticky, the banks are shifting their focus from lending margins to fee-based businesses such as Wealth Management and Equities.
🏛️ Basel III Endgame U-Turn: In a surprising regulatory win for the banks, the Fed issued a revamped proposal that could actually decrease capital requirements by nearly 5% for the largest firms. This pivot suggests Washington is prioritizing market liquidity and lending capacity.
📉 K-Shaped consumer: The resilience is real, but it’s uneven. JPMorgan saw credit card spending rise 9%, yet Wells Fargo noted “rising stress” for less affluent customers. We are seeing a divergence: the high-end consumer is buoyed by asset growth (stocks/real estate), while small businesses are tightening their belts, with new lending at JPM dropping 10%.
🔑 Takeaway: The big banks are thriving on market volatility and high-end wealth fees, but they are sounding the alarm on sticky energy inflation that could erode consumer savings by the second half of the year.
Let’s visualize them one by one and highlight the key points.
Net revenue grew 10% Y/Y to $49.8 billion ($1.6 billion beat):
Net interest income (NII): $25.4 billion (+9% Y/Y).
Noninterest income: $24.5 billion (+11% Y/Y).
Net income: $16.5 billion (+13% Y/Y).
Adjusted EPS: $5.94 ($0.48 beat).
Key developments:
📈 Trading breaks records: JPMorgan’s traders delivered their highest-ever quarterly revenue, pulling in $11.6 billion (+20% Y/Y). The performance was fueled by record-breaking results in equities and a 21% surge in Fixed Income. Volatility from the Middle East conflict and AI-driven tech swings created a perfect environment for the trading desks to capture volume.
📉 NII outlook trimmed: Despite the earnings beat, the stock saw pressure after management lowered full-year Net Interest Income guidance to $103 billion (down from $104.5 billion). While Q1 NII was strong at $25.4 billion, CFO Jeremy Barnum signaled that tailwinds are fading, suggesting future quarters may flatten as the interest rate environment shifts.
💰 Investment Banking rebound: After a disappointing end to 2025, Investment Banking fees came roaring back, surging 28% Y/Y to $2.9 billion. The standout was M&A advisory, which saw a massive 82% jump to $1.3 billion. This broad-based recovery helped offset a minor 7% dip in debt underwriting and silenced concerns about a prolonged slump in dealmaking.
🛡️ Credit reserves stabilize: The massive reserve from the Apple Card integration has moved into the rearview mirror. The bank added just $191 million to credit reserves this quarter—significantly lower than the $3 billion analysts feared—thanks to a release in consumer reserves and stable net charge-offs.
⚖️ Regulatory friction: Jamie Dimon used the earnings call to blast proposed ‘Basel III Endgame’ rules, which could force the bank to hold an additional $20 billion in capital. Dimon argued these requirements lack a clear purpose and could hinder the bank’s ability to deploy capital effectively.
🔑 Takeaways: A historic performance from the Wall Street desks drove a strong beat. The integration issues in late 2025 have been resolved. While the slight trim to NII guidance was underwhelming, the resurgence in Investment Banking and the record-setting trading floor suggest JPM is successfully pivoting its profit engines.
Key quote:
CEO Jamie Dimon: “The US economy remained resilient in the quarter, with consumers still earning and spending and businesses still healthy. At the same time, there is an increasingly complex set of risks—such as geopolitical tensions and wars, energy price volatility, and large global fiscal deficits.”
2026-04-11 22:01:06
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Today at a glance:
🛩️ Delta: Fuel Shock Litmus Test
🍺 Constellation Brands: Sober Outlook
🌿 Tilray: Global Pivot
Delta kicked off FY26 by proving its premium-heavy business model can be a shield against geopolitical chaos. Despite an unprecedented spike in jet fuel prices driven by the conflict in the Middle East, the airline easily cleared Wall Street’s expectations.
Q1 was a battle between record-high demand and record-high fuel bills. Delta pivoted quickly to fare recaptures and capacity cuts.
Revenue rose 13% Y/Y to $15.9 billion ($1.0 billion beat). Remuneration from the American Express partnership grew in the double digits, while the Maintenance, Repair, and Overhaul (MRO) segment more than doubled its revenue to $380 million. They are both part of “Other” revenue.
Adjusted EPS landed at $0.64, surging 40% Y/Y and comfortably beating the $0.57 consensus. That was despite fuel expenses rising by $330 million in Q1 alone, with jet fuel prices jumping 10% in March.
Delta's fuel costs ended the quarter at a two-year high of $2.80 per gallon, a sharp move that added $330 million in unbudgeted expenses in March alone. This visual confirms why management is bracing for this trend to accelerate toward $4.30 per gallon in the June quarter.
Management’s outlook for the June quarter was a mix of aggressive margin protection and a wait-and-see approach to the full year:
$2 Billion Fuel Headwind: Delta expects its fuel bill to be $2 billion higher in Q2. To combat this, the airline is slashing capacity by 3.5%, specifically targeting less profitable red-eye and midweek flights.
Price Hikes: Delta is guiding for low-teens revenue growth on flat capacity. It intends to pass higher costs directly to consumers through fare hikes and increased bag fees.
FY26 Outlook Reaffirmed: CEO Ed Bastian refused to walk back his $6.50–$7.50 EPS guidance for the full year, though he noted a formal update would depend on the fuel environment stabilizing over the next few months.
Bastian’s core thesis is that high fuel prices act as a catalyst for change, separating high-margin winners from weaker competitors who cannot pass on costs. While the Pakistan-brokered ceasefire and the reopening of the Strait of Hormuz provided a relief rally for the stock, Delta is clearly bracing for a challenging fuel environment by leaning into its affluent customer base.